So, you want to be a landlord


Maybe I do. Motivated by the low prices of real estate right now, it makes sense to keep my home (with a very economical mortgage payment) and rent it out rather that try to sell it. This also, if managed properly could be a nice investment, but we shall see.

A fellow I know who has been doing this for some time says that he views himself as "performing a worthwhile service for his clients", which I think is the correct way to think of yourself as a landlord. As a landlord, you are taking risks, and should be paid for taking them in just the same way as a lender or investor takes risks and is recompensed for doing so. Not to mention there is also work involved.

There are legal issues as well; along with tax issues (and advantages!). In Arizona, this whole transaction is governed by the Arizona Residential Landlord and Tenant Act. The full text of this, as well as some commentaries are available online:

Rentals and Taxes

Take a look at IRA publication 527 "Residential Rental Property".
Have any comments? Questions? Drop me a line!